On April 15, Rockville Centre resident David Miller pleaded guilty to charges of conspiracy and fraud before a federal court in Hartford, CT.

This past December, Miller, 40, was arrested after illegally purchasing 1,625,000 shares of Apple stock while employed as an institutional sales trader by Rochdale Securities LLC of Stamford. As a result of this scheme, Rochdale was left holding approximately 1,623,375 shares of Apple. It promptly traded out of the position, but suffered a loss $5,292,202.50.

“This defendant participated in a fraudulent scheme in which he would either reap huge profits through the unauthorized purchase of approximately $1 billion of Apple stock or, if he faced huge losses, explain it away as simple human error,” stated David Fein, US Attorney for the District of Connecticut. “This scheme caused catastrophic losses for his former employer and was unraveled promptly by the FBI.”

According to court documents, Miller and his co-conspirator had agreed that the co-conspirator would submit an order for Apple stock on October 25, 2012, the day Apple was scheduled to announce its earnings for the quarter, and would write the order in such a way that Miller could later claim he misinterpreted it. Miller would then execute a trade for 1,000 times the number of shares written in the order.

Over the course of the day, Miller entered a number of separate orders in Rochdale’s order management system for the amount of 125,000 shares. After Apple announced its earnings later that day and the stock price began dropping, Miller falsely claimed that he had made a mistake in ordering many multiples of what was written in a client’s order. As a result, Rochdale was left holding approximately 1,623,375 shares of Apple. It promptly traded out of the position, but suffered a loss $5,292,202.50.

Miller is charged with one count of conspiracy to commit wire fraud and securities fraud, and one count of wire fraud. His sentencing is scheduled for July 8, and faces a maximum term of 25 years of imprisonment.